On Wednesday, September 15, Chairman Bradley Smith of the Federal
Election Commission was the featured speaker at a discussion
on campaign finance sponsored by Election Law @ Moritz.
This discussion was the first of four
election-related events to be held at the Moritz College
of Law before Election Day, November 2. The other events include
the conference on Thursday, September
22, on computerized voting machines. Last Wednesday's discussion,
which addressed current issues in campaign finance regulation,
also included commentary by Professor Donald
Tobin and was moderated by Professor Edward
Foley.

Chairman
Smith's remarks called for a rethinking of longstanding
limits that federal law imposes on campaign activities undertaken
by corporations using corporate funds. Observing that these
limits were initially adopted almost a century ago, in 1907,
Smith argued that the role of corporations in America is very
different today from what it was then. While a greater percentage
of corporate activity at the height of the Industrial Revolution
might have involved large-scaled business enterprise, like "Big
Railroads," today many activities undertaken by corporations
involve not only small enterpreneurs, but also nonprofit corporations
like environmental groups and pro-life or pro-choice organizations.
Smith suggested that a one-size-fits-all approach to limiting
corporate involvement in election campaigns makes little sense
given the great variety of corporations and corporate activities
that exist in America today.

Smith focused specific attention on
the so-called "press" exemption that Congress has written into
its rules limiting corporate funding of campaign messages. This
exemption permits CBS or Fox News to finance electioneering
messages about candidates, but not corporations lacking press
credentials—and perhaps not even corporations that distribute
movies or publish books if the press exemption is limited to
"periodical" journalism (newspapers, magazines, TV nightly news,
etc.), as Congress's chosen language for the exemption would
appear to have it. Smith offered that it was anomalous, given
the original animating purpose of the limits on corporate involvement
in elections, that large-scale institutional corporations like
CBS and Fox were exempt from regulation, while small-scale advocacy
organizations were restrained.

Professor Peter Shane enjoys lunch
with the students prior to the panel
discussion on campaign finance.

Towards the end of his remarks, Smith turned to the topic of
tax-exempt organizations and the circumstances in which they
should be regulated as "political action committees," subject
to limits on the contributions they receive, including a prohibition
on any contributions from corporations. Smith indicated that
he found the "major purpose" test for determining when a group
is to be regulated as PAC, articulated only briefly in two Supreme
Court opinions, both imprecise and incomplete. In the absence
of new congressional legislation, Smith believes that groups
should not be classified as PACs if they refrain from engaging
in "express advocacy" (that is, messages that explicitly say
"vote for" or "vote against" a candidate).

On this last point, Professor Tobin
took issue with Chairman Smith. Drawing upon his previous scholarship
on the topic, Tobin argued that the "major purpose" test was
capable of implementation through administrative regulations
and that, without such rules, groups that clearly were functioning
as PACs were escaping the limits that Congress intended to apply
to PACs. Professor Tobin also asserted that Chairman Smith's
approach would mean that the evils that campaign finance rules
are designed to address—corruption, inequity, and deception—would
go unattended.

After initial remarks, there were numerous
questions from the audience, which gave both Chairman Smith
and Professor Tobin (as well as Professor Foley) an opportunity
for further reflections. Many members of the audience remarked
afterwards that the stimulating and insightful nature of the
discussion made the event a successful start to the four-part
series that Election Law @ Moritz is sponsoring this
fall.